by Maurie Backman | Published on Sept. 16, 2021
Many or all of the products here are from our partners. We may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
Bidding wars are common these days. Here's how to win one.
Buying a home today is no easy feat. Not only are property values extremely inflated, but there's also a very limited number of available homes on the real estate market. So if you do manage to find a home, you may find that you end up in a bidding war.
During a bidding war, two or more buyers duke it out over the same home. What will commonly happen is that one buyer will make an initial offer on a home, and another buyer will come in with a higher offer. That first buyer might then raise their price, and things will go back and forth until someone finally backs out or the seller finally makes a decision.
Learning how to win at a bidding war could be your ticket to buying a home in today's tricky environment. Here are three bidding war strategies it pays to use to your advantage.
Secure access to The Ascent's free guide that reveals how to get the lowest mortgage rate for your new home purchase or when refinancing. Rates are still at multi-decade lows so take action today to avoid missing out.
By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.
Getting pre-approved for a mortgage won't guarantee you a home loan. But it could help you win a bidding war.
When you come in with a pre-approval letter, it means that a mortgage lender has reviewed your finances and determined that as long as your financial situation doesn't change for the worse, you should be eligible to borrow a given amount. If you make an offer to a seller and show that seller a pre-approval letter confirming you can afford the property in question, it could give you an edge over other buyers whose finances have not yet been vetted.
You may find a home whose seller wants a delayed closing. Or you may find a seller who wants to close on a sale quickly. The more accommodating you're willing to be, the greater your chances of carving out an edge over the competition.
In the context of real estate, love letters can go a long way. If you're not familiar with the concept, a love letter is a note a potential buyer writes to a seller explaining why they adore the home in question. Making an emotional appeal can give you a leg up in this red-hot housing market. It's a great way to let sellers know what you love about the home and help them look past finances.
You might, for example, write a letter telling a seller that the layout of their house works perfectly for your growing family. If that seller has children, they might decide they'd specifically like to sell their home to another family. Best of all, love letters don't cost anything -- other than a little bit of your time.
Sometimes, the key to winning a bidding war is to offer up the highest price for a home. But some sellers look beyond money when deciding which buyer to work with. So following these tips could be your ticket to getting your offer accepted the next time you find a home you love and another buyer tries to get in your way.
Chances are, interest rates won't stay put at multi-decade lows for much longer. That's why taking action today is crucial, whether you're wanting to refinance and cut your mortgage payment or you're ready to pull the trigger on a new home purchase.
The Ascent's in-house mortgages expert recommends this company to find a low rate - and in fact he used them himself to refi (twice!). Click here to learn more and see your rate. While it doesn't influence our opinions of products, we do receive compensation from partners whose offers appear here. We're on your side, always. See The Ascent's full advertiser disclosure here.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.